Goldman Sachs has formally barred its employees from trading on prediction markets tied to financial outcomes and political events, marking one of the most comprehensive internal compliance moves by a major Wall Street bank in this fast-growing sector. The global policy explicitly prohibits trading in event contracts linked to individual companies—including Goldman Sachs itself—as well as election results, stock indices, interest rates, and macroeconomic indicators. Sports and entertainment betting remain permissible under the new rules.
The bank has outlined strict enforcement measures: repeated violations could lead to termination or closure of trading accounts, and any profits exceeding $200 may be confiscated or required to be donated to a charity of the bank’s choosing. This threshold underscores that even relatively small trades are treated as serious compliance matters, reflecting growing concerns about insider trading risks, conflicts of interest, and reputational exposure.
The restrictions come as prediction markets such as Kalshi, PredictIt, and Polymarket attract significant retail and institutional attention, while operating in a regulatory gray area under the Commodity Futures Trading Commission (CFTC). Employees with access to non-public information—mergers, earnings, regulatory decisions—could theoretically exploit these platforms in ways harder to detect than traditional securities trading.
Goldman Sachs is not alone: JPMorgan Chase, Morgan Stanley, and Bank of America have similar policies restricting staff from betting on markets linked to sensitive financial information. Bank of America reportedly expanded its rules to give specific examples of prohibited activity. The trend reflects a compliance-first approach, as banks worry that prediction-market contracts could create new channels for insider trading and information leakage.
Recent controversies have heightened scrutiny. U.S. senators voted to ban themselves from trading prediction markets after alleged misuse of government information, and suspicious wagers around political events have intensified fears that event contracts reward early access to confidential outcomes. While the legal framework remains unsettled, Goldman’s proactive stance is likely to influence other institutions. For prediction-market platforms, the policy is both a warning and an opportunity: clearer rules could ultimately help the sector mature and gain credibility with regulated entities.
